Blue Ocean Strategy: How to Create Uncontested Market Space and...

Features

• Cover Type: Hard Cover with 256 pages
• Published by: Harvard Business School Press
• Edition: 1st Edition February 3, 2005
• Written in: English
• ISBN 10 Number: 1591396190
• ISBN 13 Number: 978-1591396192
• Book Dimensions: 9.2 x 6.1 x 1 inches
• Weighs: 1.2 pounds

From Publishers Weekly
Kim and Mauborgne's blue ocean metaphor elegantly summarizes their vision of the kind of expanding, competitor-free markets that innovative companies can navigate. Unlike "red oceans," which are well explored and crowded with competitors, "blue oceans" represent "untapped market space" and the "opportunity for highly profitable growth." The only reason more big companies don't set sail for them, they suggest, is that "the dominant focus of strategy work over the past twenty-five years has been on competition-based red ocean strategies"-i.e., finding new ways to cut costs and grow revenue by taking away market share from the competition. With this groundbreaking book, Kim and Mauborgne-both professors at France's INSEAD, the second largest business school in the world-aim to repair that bias. Using dozens of examples-from Southwest Airlines and the Cirque du Soleil to Curves and Starbucks-they present the tools and frameworks they've developed specifically for the task of analyzing blue oceans. They urge companies to "value innovation" that focuses on "utility, price, and cost positions," to "create and capture new demand" and to "focus on the big picture, not the numbers." And while their heavyweight analytical tools may be of real use only to serious strategy planners, their overall vision will inspire entrepreneurs of all stripes, and most of their ideas are presented in a direct, jargon-free manner. Theirs is not the typical business management book's vague call to action; it is a precise, actionable plan for changing the way companies do business with one resounding piece of advice: swim for open waters.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Fort Worth Star Telegram, 14 February 2005
"Companies struggling to stay afloat in the market'sred oceans would do well to look into Blue Ocean Strategy."

Reader Reviews
The authors have published many articles over the last decade on Value Innovation. This is their first book. It summarizes their extensive knowledge on out-of-the-box strategic thinking. What is a BLUE OCEAN STRATEGY? The authors explain it by comparing it to a red ocean strategy (traditional strategic thinking): 1. DO NOT compete in existing market space. INSTEAD you should create uncontested market space. 2. DO NOT beat the competition. INSTEAD you should make the competition irrelevant. 3. DO NOT exploit existing demand. INSTEAD you should create and capture new demand. 4. DO NOT make the value/cost trade-off. INSTEAD you should break the value/cost trade-off. 5. DO NOT align the whole system of a company's activities with its strategic choice of differentiation or low cost. INSTEAD you should align the whole system of a company's activities in pursuit of both differentiation and low cost. A red ocean strategy is based on traditional strategic thinking - e.g. Harvard's strategy guru Michael Porter. Some cases: * Airline industry price wars result in bankruptcies and low profit margins. Southwest Airlines creates a new market by offering the speed of air travel with the low cost and flexibility of driving. * Golf equipment industry competes to win a greater share of existing golf customers. Callaway Golf creates "Big Bertha", a golf club with a large head that attracted new customers to golf that had been frustrated by the difficulty of hitting the ball. * The cosmetic industry creates a red ocean with models, expensive advertising, and promises of youth and beauty. The Body Shop creates a blue ocean that lasts more than a decade by creating functional cosmetics that defied the industry which sold emotionally appealing cosmetics. * The wine industry gluts the market with a red ocean of thousands of brands competing on the finest oaks and tannins and legacy winey names. Casella wines creates [yellow tail], a blue ocean wine that succeeded by eliminating complexity, elitism and consumer confusion and creating a fun simple image that non-wine drinkers could enjoy. A blue ocean is created in the region where a company's actions favourably affect both its cost structure and it value proposition to buyers. Cost savings are made from eliminating and reducing the factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has never offered. Over time, costs are reduced further as scale economies kick in, due to the high sales volumes that superior value generates. Examples of strategic moves that created blue oceans of new, untapped demand: - NetJets (fractional Jet ownership) - Cirque du Soleil (the circus reinvented for the entertainment market) - Starbucks (coffee as low-cost luxury for high-end consumers) - Ebay (online auctioning) - Sony (the Walkman - personal portable stereos) - Cars: Japanese fuel-efficient autos (mid-70s) and Chrysler minivan (1984) - Computers: Apple personal computer (1978) and Dell's built-to-order computers (mid-1990s). The INSEAD professors Kim and Mauborgne have written regularly on the subject of Value Innovation since 1997 in Harvard Business Review. Being a business development manager, their thought leadership on strategic innovation has inspired me tremendously over the years. Their articles have been standard texts for many MBA students for some time (e.g. "Value Innovation", "Creating New Market Space", "Charting your Company's Future"). I expect their first book to be just as dominant in any strategy library as Michael Porter's books (the guru behind the classic red ocean strategies). Peter Leerskov, M.Sc. in International Business (Marketing & Management) and Graduate Diploma in E-business